Indian Stocks Rise, Led by Lenders; Commodity Producers Fall

Indian stocks rose for a third day as HDFC Bank Ltd. led lenders higher after a government adviser said the central bank may cut interest rates to spur the economy. HDFC Bank, the country’s third-largest, climbed 3 percent after Prime Minister Manmohan Singh’s top economic adviser, Suresh Tendulkar, yesterday said rates may be lowered after the government announces the interim budget on Feb. 16. He also hinted at a new raft of stimulus measures. State Bank of India, the biggest lender, added 1.4 percent. “There are expectations of a rate cut,” said Ajay Bodke, who helps manage about $1 billion in equities at IDFC Asset Management Co. in Mumbai. “We may see some stimulus measures that could be announced in the vote on account of the budget.” The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 63.58, or 0.7 percent, to 9,647.47. The S&P CNX Nifty Index on the National Stock Exchange climbed 0.5 percent to 2,934.50. The BSE 200 Index advanced 0.7 percent to 1,128.85. S&P CNX Nifty futures for February delivery added 0.3 percent to 2,921.10. Tax cuts would be desirable to spur demand, Tendulkar said, without elaborating. The government has already announced a $4 billion plan to invest in roads and ports, and on Jan. 2 increased the overseas investment limit in the local corporate bond market to soften the impact of recession on India’s economy. The budget will be a temporary one, pending the appointment of a new government after the elections. HDFC Bank added 3 percent to 947 rupees. State Bank rose 1.4 percent to 1,164.10 rupees. Commodity Producers Decline Sterlite Industries (India) Ltd., the nation’s largest copper producer, fell 0.7 percent to 278.40 rupees. Hindalco Industries Ltd., India’s biggest aluminum producer, declined 2.2 percent to 44.95 rupees. Tata Steel Ltd., India’s biggest producer of the alloy, slid 1.4 percent to 196.85 rupees. Copper and aluminum declined in London as the global economic slowdown reduced demand for industrial metals used in buildings and cars. Copper for delivery in three months fell 1.3 percent, to $3,532 a metric ton, as of 9:39 a.m. on the London Metal Exchange. Aluminum declined 1.2 percent to $1,427.25 a ton. Oil and Natural Gas Corp., India’s biggest exploration company, fell 1 percent to 717.45 rupees. The oil producer disputed an income tax demand for 60 billion rupees ($1.2 billion). The dispute relates to eligibility for tax breaks in the production of oil and gas. Overseas investors bought a net 603 million rupees of Indian stocks on Feb. 6, according to the nation’s market regulator. The following were among the most active shares traded on the Bombay and National stock exchanges. Stock symbols are in parentheses after company names: Rail-equipment makers: Texmaco Ltd. (TXM IN), an Indian railway equipment maker, Kalindee Rail Nirman (Engineers) Ltd. (KRNE IN), a railroad construction services company and Titagarh Wagons Ltd. (TWL IN), which makes railroad cars, gained ahead of a vote on the nation’s rail budget on Feb. 13 on expectation of winning new orders. Texmaco gained 2.9 rupees, or 5.4 percent, to 56.80 rupees. Kalindee Rail added 10.2 rupees, or 6.9 percent, to 157.50. Titagarh Wagons rose 30.6 rupees, or 14 percent, to 242.10. Steel Authority of India Ltd. (SAIL IN) fell 3.5 rupees, or 3.9 percent, to 86.45. The country’s second-biggest producer of the metal was cut to “neutral” from “outperform” at Macquarie Group Ltd. United Spirits Ltd. (UNSP IN) added 12.15 rupees, or 1.7 percent, to 712.95. The Indian distiller is planning to sell as much as 49 percent of Scotland-based Whyte & Mackay, the Business Standard newspaper reported, without saying where it got the information from.